Nigeria’s ToT records fourth consecutive quarterly decline

Nigeria’s Terms of Trade (ToT) of all commodities recorded a slight decline of 0.03 percentage points in the third quarter of 2023, National Bureau of Statistics (NBS) has revealed.

TOT represents the ratio between a country’s export prices and its import prices. An increase between two periods (or when TOT is greater than 100 per cent) means that the value of exports is increasing relative to the value of imports and the country can afford more imports for the same value of exports.

The Q3’23 performance indicates a lower rate of decline with the implication that the fourth quarter, Q4’23, may likely show the indices in positive territory.

Findings from the NBS data on Commodity Prices Indices and ToT, showed that it has been on a negative trend since Q3’22 of 2022 when it recorded a fall of 0.50 percentage points from an increase of 0.11 percentage points in the year.

In its Q3 ’23 Commodity Prices Indices and ToT report released recently, NBS said that the decline in Q3’23 was a result of a 0.04 percentage point decline in ToT in September. NBS also said that the All-Commodity Group Import Index increased by 0.21 per cent in Q3’23 and its Export Index increased by 0.18 per cent.

“The all-commodity terms of trade for July, August, and September 2023 stood at 102.46 per cent, 102.47 per cent, and 102.43 per cent, respectively. The All-Commodity Group Terms of Trade increased by 0.01 per cent points in August and decreased by 0.04 per cent points in September resulting in a decrease of 0.03 per cent points between July and September 2023. The All-Commodity Group Import Index increased by 0.21 per cent between July and September 2023. This can be attributed to the increases in the change in the prices of products of Textiles and textile articles by +0.37 per cent, Mineral products by 0.36 per cent points and Wood and articles of wood, wood charcoal and articles by 0.29 per cent points.

“The All-Commodity Group Export Index increased by 0.18 per cent between July and September 2023. This is due to changes in the prices of Boilers, machinery, and appliances; parts thereof (0.36), Vehicles, aircraft, and parts thereof, vessels etc (0.34), Mineral Products (+0.31) and Plastic, rubber, and articles thereof (0.22). The major export destinations of Nigeria in Q3’2023 were Spain, India, The Netherlands, Indonesia, and France,” it said.